VA Home Loan Limits
The VA home loan program is an important way for service members, veterans, surviving spouses, and other eligible people to affordably buy a home in the U.S. This program provides a government guarantee against 25 percent of the loan in most circumstances. Veterans Guide can help you understand the VA home loan limits, including what to do if you have a prior VA loan or partial entitlement.
VA home loans help veterans get a secure path to homeownership. The Veterans Benefits Administration backs these loans, providing extra security and reducing risks for the lender, making them more likely to offer funding. VA home loan limits depend on whether or not you have used the benefit in the past and, in some cases, where you live in the U.S.
Service members, veterans, surviving spouses, and others might be eligible to receive this benefit through the VA. Veterans Guide can walk you through the process, including what additional eligibility requirements you might have to meet to satisfy lenders.
What Are VA Home Loans?
VA home loans help service members, eligible surviving spouses, and veterans buy, repair, or keep homes. Under the program, the Veterans Benefits Administration offers guarantees to lenders to entice them to approve loans. The program offers several benefits, including:
The Veterans Administration does not issue the loans. Rather, the government backs the loans, which private lenders then issue.
What Are the Limits for VA Home Loans?
A VA home loan limit is not a limit on the loan you can receive but rather a cap on the amount the VA will guarantee to your lender.
As of 2020, veterans eligible for the VA home loan program with full entitlement do not have any loan limits. The Blue Water Navy Vietnam Veterans Act of 2019 provided this change. Previously, the limit was $144,000. At that time, the government would only guarantee the lender a payment of $36,000 for loans up to $144,000.
You might have to provide a down payment if you have partial entitlement, also called remaining entitlement. For example, you might have partial entitlement if you have a prior VA home loan you have not yet fully paid.
How Do VA Home Loan Limits Differ?
VA loan limits depend on your entitlement and where you plan to purchase a home.
Limits by Entitlement
For applicants with full entitlement, the VA offers the lender a guarantee of 25 percent of the loan amount over $144,000, with no upper limit.
If your loan is more than $144,000 and you have remaining entitlement, most lenders require that your entitlement, down payment, or both are at least 25 percent of the loan amount. If you must provide a down payment, you will receive a reduction on the one-time VA funding fee on the loan.
To have full entitlement, you must meet at least one of the following criteria:
Full entitlement is different from the 100 percent disabled veteran housing allowance, which provides grants to some people with service-related disabilities.
On the other hand, if you meet one of the following criteria, you might have partial entitlement:
If you have partial entitlement, the VA home loan limit calculation depends in part on where you live.
Limits by County
The VA home loan limit varies by county for applicants with partial entitlement. The VA pays the lender up to 25 percent of the county loan limit minus the entitlement you’ve already used. County limits only apply when you have partial entitlement.
The Federal Housing Finance Agency sets the standard limit. The standard VA home loan limit in 2023 is $726,000. However, in some areas, this limit is higher. For example, the baseline loan limit is $1,089,300 for one-unit properties in Alaska, Hawaii, and Guam.
Because private lenders’ loan rate terms differ under the VA home loans program, the terms and cost of your mortgage might be impacted by your debt-to-income ratio and credit score.
A lender could offer you a jumbo loan if you have partial entitlement. The FHFA would not guarantee this loan, as it exceeds the FHFA’s limits. To qualify, borrowers typically need a very high credit score, good credit history, and a very low debt-to-income ratio.
Who Is Eligible for a VA Home Loan?
To be eligible for a VA home loan, you must receive a certificate of eligibility. You must meet at least one of the following requirements to get this certificate:
If you have received a dishonorable discharge, you might also qualify for a VA home loan if you apply for a VA discharge upgrade or undergo the Character of Discharge review process.
The approval for a VA home loan depends on the lender and considers your credit score and debt-to-income ratio. Being aware of the credit requirements is an essential step in securing a VA Home Loan. However, limits are very favorable to people who have low credit scores.
How To Apply for a VA Home Loan
To apply for a VA home loan, you can start by downloading the VA Buyers Guide. The next step is to request your certificate of eligibility from the VA. You can request the certificate online from the VA. Then, you can start the loan application with your lender of choice.
To get a certificate of eligibility, you will need:
A statement of service must be signed by your commander, adjutant, or personnel officer and must include the following:
Depending on the details of your service, you might also need to provide other forms and documentation.
The VA home loan program can be a way to secure home ownership, and you can get help navigating the application process. Contact a representative at Veterans Guide to learn more.